Modi government's ambitious scheme to connect small towns with one hour long flights whose fares are capped at Rs 2500 has received an "encouraging response", said the civil aviation ministry on Wednesday.
A release from the ministry said that it has received 45 initial proposals from 11 bidders to connect nearly 200 "unserviced routes" under the regional connectivity scheme.
Sources say only two regular airlines -- Air India and Spicejet -- are among the 11 bidders who have participated in the scheme. "The rest are all non scheduled Operators,"said an official familiar with the details.
The details are expected to be shared at a press briefing on Thursday by the junior aviation minister. But the aviation ministry has asked that all the routes that have been bid for are spread over 65 airfields. Of these, 52 airfields are currently non-operational while 13 other airports are "under served operational airports."
Last year, on October 21, the government has launched an ambitious scheme UDAN -- Udega Desh Ka Aam Nagrik -- to connect small towns and cities that don't have flights even though there are existing airfields close to these places.
To keep the flights affordable and attractive to the low income group families, the government has capped fares at Rs 2,500 per ticket for flights of 500 kilometres or less than an hour.
If the actual cost of the ticket is higher than Rs 2500, then the government would pay the difference. Money for this is being collected from regular airlines that operate on profitable routes and put in what's being called as a Viability Gap Fund (VGF).
"Counter-bids have now been invited against these initial proposals, the last date of submission is February 1, 2017. The routes or networks will be awarded to the bidders who quote the lowest requirement of Viability Gap Funding (VGF) against such routes,"said the aviation ministry release.
The Airport Authority of India has also decided to expedite the process of "readying the airports that has seen interest from bidders."
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